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VIRTUES OF BAD TIMES Interaction Between Productivity Growth and Economic Fluctuations Author info | Abstract | Publisher info | Download info | Related research | Statistics Aghion, Philippe
Saint-Paul, Gilles
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We develop a model of optimal productivity growth underdemand fluctuations. We consider two alternative hypotheses. First,we assume that productivity growth is costly in terms of currentproduction. Second, we assume that the cost of productivityimprovements is independent of current production. It is shown that,in the first case, productivity improvements will be countercyclicalwhereas, in the second case, they will be procyclical. The model thenis used to study the impact of the frequency and amplitude offluctuations on long-run growth. The results corresponding to thefirst hypothesis are shown to be consistent with recent empiricalwork.
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Article provided by Cambridge University Press in its journal Macroeconomic Dynamics .
Volume (Year): 2 (1998)
Issue (Month): 03 (September)
Pages: 322-344
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Handle: RePEc:cup:macdyn:v:2:y:1998:i:03:p:322-344_00Contact details of provider: Postal: The Edinburgh Building, Shaftesbury Road, Cambridge CB2 2RU UK Fax: +44 (0)1223 325150 Email: Web page: http://journals.cambridge.org/jid_MDY
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